Why innovation-driven Chile might be just the team to beat old-school Brazil.

By Daniel AltmanDaniel Altman is senior editor, economics at Foreign Policy and an adjunct professor at New York University's Stern School of Business. Follow him on Twitter: @altmandaniel.

June 27, 2014

Brazil is very good at soccer. These days, so is Chile. As it happens, Chile is also very good at a lot of other stuff that Brazil struggles to master. It may be smaller, but Chile is the country with its eyes on the future, not the past. And this is true in soccer as well.

Brazil is the overwhelming favorite to win the World Cup. They’ve triumphed five times already, their players are prized the world over, and they’re playing at home. Soccer may have been born in the British Isles, but it came of age in Brazil. So the story goes.

But Brazil hasn’t won the World Cup since 2002, which was also the last time its team made the final. A lot has changed since then. Players have come and gone, but there has been no one with the primacy of a Ronaldo or a Pelé. Neymar is clearly destined for greatness, but he’s still a young and mercurial talent. The team around him seems to go grimly through the motions, waiting for him to score.

The Brazilian economy has fallen into a similar tedium. After growing by 7.5 percent in 2010, thanks in part to a flood of foreign capital fleeing the crisis in traditional markets, it expanded by a total of just 6.2 percent over the next three years. For a country with millions of young people entering the labor force each year, this is not good news.

The old ways are holding Brazil back: According to the World Bank, corruption is just as pervasive as it was more than a decade ago, well before Brazil’s recent growth spurt. The tax system is just as difficult to navigate, requiring a whopping 2,600 hours of work annually for businesses. In the absence of reforms, only the discovery of offshore oil — a natural resource whose appearance is hardly reliable, like Neymar’s ability on the field — offers hope of another boom.

Chile is the polar opposite. With less than a tenth of Brazil’s population, its talent comes in a smaller package. (In fact, it also has the shortest team at the World Cup.) But it’s a package that has been carefully crafted for maximum effectiveness. Chile routinely tops South America in rankings of economic competitiveness and business climate, even finishing above some Western European giants. Net inflows of foreign direct investment average around 10 percent of gross domestic product, three times the rate for Brazil. And Chile is an economy on the move, ranking 46th in the Cornell-INSEAD-WIPO Global Innovation Index to Brazil’s 64th.

Chile’s soccer has lately been innovative as well. Starting with the hiring in 2007 of Argentine coach Marcelo Bielsa, one of the sport’s most brilliant iconoclasts — even the United States tried to sign him, according to media reports — the team sought the greatest leverage for its limited talent pool. Bielsa imposed his favored 3-3-1-3 formation, an unusual setup that required a passel of pacy attackers and exceptionally flexible defenders. Bielsa may have left the team in 2011 for Athletic Bilbao in Spain,but Jorge Sampaoli, Chile’s latest Argentine coach, says he idolizes Bielsa and is imposing an evolution of his countryman’s system in Brazil. The 3-3-1-3 formation remains, but perhaps with more emphasis on playmaking behind the three forwards.

Meanwhile, Brazil is stuck in the past. Luiz Felipe Scolari led Brazil to its victory in 2002 but has only won the lopsided Uzbek league, a Brazilian cup, and last year’s Confederations Cup since then. He’s a good motivator and a decent tactician, but he’s no innovator. In the World Cup this year, Scolari has used a standard 4-2-3-1 formation, with Brazil’s traditional attacking fullbacks. For creativity, he relies on his players. But only Neymar and Oscar have shown much trace of Brazil’s vaunted improvisational style.

Scolari’s strategy has worked before, of course. But if any team can find a way to crack the Brazilian system using sheer tactical intelligence, it’s Chile. Brazil is a dinosaur. A big, scary dinosaur, to be sure — but the only question is how long it can last before extinction.

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Michael GoodmanMichael Goodman is a freelance soccer writer who's work can frequently be found on Grantland.com. He also believes that counting things is a good idea. Follow him on Twitter: TheM_L_G
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